Elastic Procurement Is Better than Traditional Procurement
A good procurement event is one in which the buyers find the best combination of problem-solution fit, a reliable supplier, and a reasonable price. We call this value-for-money. Problem-solution fit refers to the degree to which the good or service purchased fixes the problem that motivates the procurement. The buyer’s objective function is to maximize […]
Improving SME Procurement Enables Social Procurement
B2B buyers have multi-fold corporate responsibilities. First and foremost, they must obtain value-for-money in purchasing solutions that solve problems their organization faces. This means buying the right solution, from the right supplier, at the right price. This is part of a broader mandate. Private companies exist to generate profitable cash flow for their owners. Government […]
Social Procurement Needs Us to Ask the Right Questions
Organizations buy goods and services to solve problems. If there is a subsequent issue with the procurement, if it turns out that what they bought didn’t fix whatever needed fixing, it could be for many different reasons. But the core explanation may be mis-specification of the problem. It is likely that what they sourced was […]
The Game Theory of Procurement and RFPs
Jeff Bezos is one of the wealthiest men in the world. He is extraordinarily good at management. He has a useful analogy for decisions. “Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through […]
Supplier Relationship Management Is Not an Adversarial Process
In the movie “Jerry Maguire,” the inciting incident is the protagonist’s departure from his established agency to pursue his own principled approach to managing professional athletes. After a rousing call to action on his way out the door that falls on deaf ears (but one), he rushes to call his clients as quickly as possible, […]
How to Make Digital Procurement Transformation Succeed
Digital transformation involves implementing technology to effect change. This shift we seek may refer to improved business processes, products, or business models, or some combination of improved outcomes. At a high level, it involves two phases: implementation, followed by continuous improvement. According to apocryphal reports, it fails 70% of the time. Yet, businesses still keep […]
How Can Procurement Attract and Retain Talent?
I often remark that “nobody grows up wanting to be in procurement.” Maybe somebody out there did. I have not met them yet. When children are in school, they dream of more glamorous occupations: professional athlete, entertainer, politician, and now, influencer. Of course, not everyone is suited to be these things. Perhaps they lack the […]
Reference Checks Reign Supreme in Vendor Risk Management
There has been an explosion in services that seek to help buyers vet suppliers. These services take unstructured data from a variety of sources online and develop a structured set of data, specific to an individual vendor. Some of them may use AI (and shortly generative AI) to make judgments about the suppliers. This is […]
What Important Procurement Truth Do Very Few People Agree With You On?
Peter Thiel wrote the book on entrepreneurship: Zero to One: Notes on Startups, or How to Build the Future, In it, he talks about the principles that he believes work well for people looking to solve problems. For him, there is one question that can help him understand the potential employees or the founders of […]
Augmented Procurement Reality
Enterprise Resource Planning (or “ERP”) systems are core to the way organizations do business today. Think of them as a general ledger for all kinds of workflow, or as the definitive source of truth for various processes and transactions. This does not mean that they are easy to use. ERP modules are functional components that […]